B2B Payments

New Payment Rails Take On Real-Time B2B Friction

The latest data from Nacha found a new record-high growth rate for adoption of ACH payments, with B2B payments showcasing a surge in adoption of the legacy payment rail that has recently turned to technologies that can augment the service, from the movement of transaction data with an ACH payment to the deployment of Same Day ACH.

Yet this week’s look at payment rail innovation finds that many players in the B2B space are turning to develop new payment networks and services infrastructure from the ground up, rather than rely on new technology for legacy payment rails to improve the business payment experience.

Signature Bank Mixes Rails For AP

Signature Bank, based in Chicago, announced a new accounts payable solution for its corporate clients designed to support businesses’ demand for choice when it comes to payment rails.

The bank said last week that it is rolling out its Finrails AP solution, a business-to-business (B2B) payments automation solution that supports Visa commercial cards, ACH and paper checks. Designed with features to streamline the supplier on-boarding process, Finrails AP enables companies initiate transactions via a single payment file upload.

In a statement, Visa Global Head of Business Solutions Kevin Phalen pointed to the “choice, flexibility and security” the B2B solution offers via supporting multiple payment rails.

Cashfree Links India Firms To Faster Payments

In India, payments and banking technology firm Cashfree recently revealed its initiative to open up the nation’s real-time payment network to corporates with the launch of its UPI (Unified Payments Interface) stack, a solution designed to enable businesses to onboard to the rail.

“As UPI continues to witness tremendous growth in India, we want to offer businesses a simple way to use the UPI infrastructure for the widest range of business payment applications,” explained Cashfree Co-Founder and CEO Akash Sinha in a statement.

The UPI stack offers application programming interfaces (APIs) to support corporates UPI integration in a range of their back-office operations, including payments, collections and refund processing.

Clear Embraces Blockchain For High-Volume Transactions

Blockchain startup Clear is embracing distributed ledger technology to facilitate high-volume B2B transactions, with a focus on the telecommunications sector, a market in which telco partners must exchange a high volume of payments and data while ensuring compliance to complex agreements between each other.

The company, which recently spoke with PYMNTS about its technology following a funding round, has plans to offer its solution to other industries as well. According to Clear Co-Founder and Executive Chairman Eran Haggiag, existing payment rails cannot handle the data burden, particularly in cross-border payment scenarios.

Yet, he told PYMNTS, Clear also aims to integrate with existing payment networks with the ability to both operate on top of current infrastructure, or bypass it altogether.

Transparent Systems Wields Blockchain For Real-Time Settlement

Transparent Systems is another newly-funded startup wielding blockchain technology for B2B payments, though this company is targeting its solution toward real-time settlement.

Company Co-Founder and Chief Technology Officer Jeff Kramer told PYMNTS in a recent interview that Transparent Systems is addressing the need for businesses to enable real-time settlement, particularly for repeat transactions on a consistent basis with their business partners, to mitigate counter-party risk.

The company is “starting from scratch” to facilitate B2B payments, rather than using existing payment rails, he said, noting that doing so means addressing pain points from the get-go beyond the challenge of moving money, including easing friction in onboarding and integration.

Banks Back Blockchain For Settlement, Too

Recent reports noted a group of financial institutions, spearheaded by UBS Group, has begin to develop a blockchain-powered cross-border trade settlement solution.

The consortium is developing a digital token, the utility settlement coin (USC), to facilitate the movement of both money and data across borders, with UBS Head of Strategic Investment and FinTech Innovation Hyder Jaffrey explaining that the technology removes “settlement risk, the counterparty risk, the market risk. All of those risks add up to costs and inefficiencies in the marketplace.”

Metro Bank Loops SMBs Into Bacs

In the U.K., Metro Bank recently announced its participation into the Bacs payment network, operated by Pay.UK, to facilitate Direct Debit origination for its business customers.

The payment rail addition is the result of the bank’s partnership with business payments solution provider Bottomline Technologies, an announcement said, with Metro planning to roll out the service for small and medium-sized businesses (SMBs) in the “coming months.” The capability will enable businesses to initiate, collect and manage Direct Debit payments; according to Bottomline Managing Director, Europe Nigel Savory, SMBs “have traditionally found it challenging to get access to Direct Debit with all the benefits it brings.”

Nacha Touts ACH’s Growth For B2B

As blockchain and newer real-time payment networks gain traction among businesses, Nacha says ACH is also seeing a boost in the B2B payments arena.

The organization announced last week that the annual growth rate of The ACH Network’s volumes in 2019 reached a 12-year high, with 24.7 billion transactions completed on the network. B2B payments alone saw a 12 percent year-on-year increase, reaching 4 billion payments last year.

Nacha also pointed to the growing adoption of its newest ACH service, Same Day ACH, valuing $247 billion in transactions last year — though Nacha did not reveal how much of that volume could be attributed to corporates using Same Day ACH.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.